Social Impact Bonds (SIBs) are a private financing mechanism used to fund social programs. Also termed 'Pay For Success,' SIB financing involves private entities funding projects aimed at improving social outcomes. If by the end of the project period, 'success' metrics are met (according to third-party evaluators), investors then profit by being paid interest on top of the reimbursed government funds for the cost of the project. This page includes a collection of updates and critical perspectives on these profit structures. For additional resources and related updates in education, visit EduResearcher at http://eduresearcher.com. [Links to external site]

Abstract"This article considers proponents’ arguments for Pay for Success also known as Social Impact Bonds. Pay for Success allows banks to finance public services with potential profits tied to metrics. Pay for Success has received federal support through the Every Student Succeeds Act of 2016 and is predicted by 2020 to expand in the US to a trillion dollars. As school districts, cities, and states face debt and budget crises, Pay for Success has been advocated by philanthropists, corporate consulting firms, politicians, and investment banks on the grounds of improving accountability, cost savings, risk transfer, and market discipline. With its trailblazing history in neoliberal education, Chicago did an early experiment in Pay for Success. This article provides a conceptual analysis of the key underlying assumptions and ideologies of Pay for Success. It examines the claims of proponents and critics and sheds light on the financial and ideological motivations animating Pay for Success. The article contends that Pay for Success primarily financially benefits banks without providing the benefits that proponents promise. It concludes by considering Pay for Success in relation to broader structural economic considerations and the recent uses of public schooling to produce short-term profit for capitalists."

AbstractThis Article examines the matrix of vulnerabilities that low-income people face as a result of the collection and aggregation of big data and the application of predictive analytics. On one hand, big data systems could reverse growing economic inequality by expanding access to opportunities for low-income people. On the other hand, big data could widen economic gaps by making it possible to prey on low-income people or to exclude them from opportunities due to biases entrenched in algorithmic decision-making tools. New kinds of “networked privacy” harms, in which users are simultaneously held liable for their own behavior and the actions of those in their networks, may have particularly negative impacts on the poor. This Article reports on original empirical findings from a large, nationally-representative telephone survey with an oversample of low-income American adults, and highlights how these patterns make particular groups of low-status Internet users uniquely vulnerable to various forms of surveillance and networked privacy-related problems.In particular, a greater reliance on mobile connectivity, combined with lower usage of privacy-enhancing strategies, may contribute to various privacy and security-related harms. The Article then discusses three scenarios in which big data—including data gathered from social media inputs—is being aggregated to make predictions about individual behavior: employment screening, access to higher education, and predictive policing. Analysis of the legal frameworks surrounding these case studies reveals a lack of legal protections to counter digital discrimination against low-income people. In light of these legal gaps, the Article assesses leading proposals for enhancing digital privacy through the lens of class vulnerability, including comprehensive consumer privacy legislation, digital literacy, notice and choice regimes, and due process approaches. As policymakers consider reforms, the Article urges greater attention to impacts on low-income persons and communities."

"I’ve heard rumblings from folks in a number of states about pending legislation to establish home visit programs for expectant families or families with newborns or pre-school age children. So many families are struggling. Poverty is at an all time high. When hearing about such bills, those who have not been faced with the challenge of navigating impersonal bureaucracies, will likely think, “Thank goodness! Our elected officials are recognizing how hard things are and are stepping up to do something for those people.”

For those who think that, I wish you were right, but the reality is considerably more troubling. I follow money, and it tells a different story. It tells the tale of a sweeping program of “collective impact” cultivated by consultancies like Third Sector Capital Partners, FSG, and the Nonprofit Finance Fund. Strive Together, a non-profit program incubated in Cincinnati, OH under the wing of Gates Foundation-funded Knowledgeworks (promoter of learning ecosystems), will carry out the program."...

"This post provides additional background on the ReadyNation Global Business Summit on Early Childhood Education that will take place at the Grand Hyatt hotel in New York City November 1-2, 2018. No U.S. educators or policy advocates may attend unless they come with at least four pre-approved business sponsors. Review the draft agenda here.

But these risks are not getting enough political and public attention. One way to better appreciate the risks that come with our big data future is to consider how people are already being negatively affected by uses of it. At Cardiff University’s Data Justice Lab, we decided to record the harms that big data uses have already caused, pulling together concrete examples of harm that have been referenced in previous work so that we might gain a better big picture appreciation of where we are heading.

We did so in the hope that such a record will generate more debate and intervention from the public into the kind of big data society, and future we want. The following examples are a condensed version of our recently published Data Harm Record, a running record, to be updated as we learn about more cases.

1. Targeting based on vulnerability

With big data comes new ways to socially sort with increasing precision. By combining multiple forms of data sets, a lot can be learned. This has been called “algorithmic profiling” and raises concerns about how little people know about how their data is collected as they search, communicate, buy, visit sites, travel, and so on.

Much of this sorting goes under the radar, although the practices of data brokers have been getting attention. In her testimony to the US Congress, World Privacy Forum’s Pam Dixon reported finding data brokers selling lists of rape victims, addresses of domestic violence shelters, sufferers of genetic diseases, sufferers of addiction and more.

2. Misuse of personal information

Concerns have been raised about how credit card companies are using personal details like where someone shops or whether or not they have paid for marriage counselling to set rates and limits. One study details the case of a man who found his credit rating reduced because American Express determined that others who shopped where he shopped had a poor repayment history.

This event, in 2008, was an early big data example of “creditworthiness by association” and is linked to ongoing practices of determining value or trustworthiness by drawing on big data to make predictions about people.

3. Discrimination

As corporations, government bodies and others make use of big data, it is key to know that discrimination can and is happening – both unintentionally and intentionally. This can happen as algorithmically driven systems offer, deny or mediate access to services or opportunities to people differently.

Some are raising concerns about how new uses of big data may negatively influence people’s abilities get housing or insurance – or to access education or get a job. A 2017 investigation by ProPublica and Consumer Reports showed that minority neighbourhoods pay more for car insurance than white neighbourhoods with the same risk levels. ProPublica also shows how new prediction tools used in courtrooms for sentencing and bonds “are biased against blacks”. Others raise concerns about how big data processes make it easier to target particular groups and discriminate against them."...

"James Heckman and Robert Dugger, with support from philanthropies like the Pew Charitable Trusts and venture capitalists like JB Pritzker, have carefully honed a sales pitch for investment in early childhood education. After years of practice, it is now a well-oiled machine. The Heckman Equation promises high rates of return to investors willing to swallow the repugnant premise that through “evidence-based” programs, the character traits of at-risk toddlers will be “fixed.”...

"Susan Ochshorn founded ECE PolicyWorks to advocate for high-quality education for young children.

In this post, she analyzes the pernicious influence of financiers and hedge fund managers on decisions about the fate of young children, as they figure out how to make a profit with “Social impact bonds.”

Everyone loves the idea of early childhoood education. But unfortunately the financiers have figured out how to make it pay—for them.

Ochshorn shows how Goldman Sachs and other investors saw a path to profit and how public officials fell in love with metrics. The children? Not so much.

She gives the background of the social impact bond.

And she concludes that commodifying children is a very bad idea:

“By last summer, the U.S. Department of Education had gotten on board. Under the aegis of John King, former education commissioner of New York, they launched a Pay for Success grant competition, $2.8 million available for state, local, and tribal governments interested in exploring the investment vehicle’s feasibility. Early this year, as Betsy DeVos replaced King in the top job, the department distributed funding ranging from $300 to $400 million to 8 recipients. Rigorous evaluation, as the Urban Institute’s “Pay for Success Early Childhood Education Toolkit,” makes clear, is the sine qua non of the transaction, precise metrics and data collection essential for determining the venture’s outcome.

“To quantify is to have the illusion of mastery over all that defies our control, yet the metrics fall short, the ends perverted: they cannot capture children’s unique capacities, or the uneven trajectory of their development—as messy and challenging as it gets.

“Three- and four-year-olds are not commodities. They have had the grave misfortune of entering the academic arena in a period of measurement gone berserk. What young children need most is time, and sustained support for experiences that nourish their bodies, minds, and spirits—their due, according to the Convention on the Rights of the Child, which the U.S has not yet ratified more than 25 years after the resolution was adopted by the U.N. General Assembly."...

From WrenchInTheGears blog"With the debut of their Blockchain transcript, Southern New Hampshire University’s “College for America” and Learning Machine are in the vanguard of innovative digital credentialing for adults. At the other end of the “lifelong learning” spectrum, Trustlab’s IXO Foundation has staked out the early childhood space with a Blockchain DApp called Amply. Amply, an online attendance-taking system designed to track “impact,” is being piloted through SmartStart, a South Africa pre-school franchise.

This proof of concept, financed in part through UNICEF’s innovation venture capital fund, had registered over 3,100 students across 85 centers as of spring 2018. Innovation Edge, a South Africa based social impact investment portfolio manager specializing in ed-tech, IoT health, and early childhood education, is another Amply funder. Remember Ready Nation’s Global Business Summit on Early Childhood? The one coming up in New York this November that I blogged about here? The one where early childhood educators and policy advocates were specifically EXCLUDED unless they came with a vetted group of four business people? Well, Cynthia McCaffrey, director of UNICEF’s office of global innovation will be speaking at that event, and Innovation Edge is listed as a sponsor.

While at first glance Amply may look like many other smartphone apps, there’s a lot going on beneath the surface. In South Africa the government reimburses preschool providers based on the number of children attending school each day. With Amply, providers take attendance digitally rather than on paper."...

"It’s time activists began to develop a working knowledge of Blockchain and self-sovereign digital identity, because these are the mechanisms that will drive the transition to IoT monitoring for the purposes of Pay for Success deal evaluation. I created a slide share about Blockchain as part of a “Smart Cities” post I wrote last year, which can be accessed here if it helps to have visuals.

The technology became public in 2008 when Santoshi Nakamoto published the whitepaper “Bitcoin: A Peer to Peer Electronic Cash System.” No one knows who Nakamoto actually is. Over the past decade Bitcoin digital currency has generated significant buzz, yet many believe Blockchain will be even more transformative, as big as or bigger than the rise of the Internet.

MIT is heavily involved in Blockchain research and development through its Digital Currency Initiative, housed within the MIT Media Lab. The program is led by Neha Nerula, formerly of Google who holds a PhD from MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL). Nerula served on the World Economic Forum’s Global Future Council on Blockchain from 2016-2017. Its faculty advisor, Simon Johnson, co-founded the Sloan School’s Global Entrepreneurship Lab and worked as chief economist for the International Monetary fund.

In an April 2018 article, “In Blockchain We Trust,” Michael Casey, global economics professor, goes into detail regarding the use of Blockchain to create “value” in virtual worlds by securing ownership of digital assets. As we kill off the planet and begin spending more and more time in online environments, there’s cold comfort knowing the forces of global monopoly capital are rapidly colonizing digital worlds, too.

Blockchain is the structure that underpins crypto-currencies like Bitcoin, but it’s much more than that. In its simplest terms, it’s a ledger that keeps track of transactions, all kinds of transactions that may or may not have a financial component. Unlike a dusty accounting ledger or its modern equivalent, something like Quick Books, data stored on Blockchain is distributed. This means multiple exact copies of the same encrypted data live on peer-to-peer networked computers, which supposedly makes it more secure. If one node goes down the information is not lost. It is portrayed as the ultimate “permanent record.”

Data stored on Blockchain is “verified” by computers that use a consensus process, competing to solve cryptographic puzzles in exchange for Bitcoin payments. This cryptographic authentication injects “trust” into transactions, enabling security without the need of a third party to ensure everyone is on the up and up. Once data is locked into Blockchain, promoters of the technology say it is immutable, unchangeable. Although, as with everything coded, there are still vulnerabilities and hacks as discussed in this MIT Technology Review article “How secure is blockchain really?”

It may be some indication of the level of actual “trust” developers have in blockchain that the Chamber of Digital Commerce and Coin Center created the Blockchain Alliance in the fall of 2015 to “pro-actively engage” with regulatory and law enforcement agencies. In the United States, government partners include: DEA, DHS, DOJ, FBI, US Marshal Service, US Secret Service, ICE/HSI, CBP, IRS-Criminal Investigation, FDA, US Postal Inspection, Commidity and Futures Trading Commission, SEC, FTC, FDIC, as well Attorney General’s Offices in California, Texas, New York, and Ulster County. Seems they have some rather powerful partners.

Some Blockchains are public, others are private. Data stored on private chains can be made accessible using a combination of matched public and private “keys.” A public key is used to verify and encrypt data. It is public and can be known by anyone. A private key decrypts data that has been encrypted with its paired public key. These keys consist of extremely long sets of characters, which can be shortened to a public key fingerprint or associated with biometric information via a biocryptic process.

Digital currency payments validated with biometric information like iris scans have been prototyped using refugee populations over the past few years (see the featured image). While the technology that undergirds it is complex, programmers are developing accessible interfaces that make using digital currency as easy as opening an app and verifying a transaction, financial or otherwise, with a thumbprint or facial-recognition scan.

Beyond their capacity to hold tokenized digital currencies, e-wallets are being used to hold all sorts of other information. They are touted as an effective means to manage the continuous flows of activity, money, and data that surround us. In the fall of 2016, the state of Illinois; home to many Pay for Success players including: James Heckman, JB Pritzker, Rahm Emmanuel, the MacArthur Foundation, and the Chicago Mercantile Exchange (trading financial and commodity derivatives), charged a Blockchain Taskforce with examining ways to use the technology to promote economic development in the state and “improve record keeping.” Their final report, issued in January, is available here.

Below is a map of the players involved. Click here for the interactive version.

By Alison McDowell"I created this video as a follow up to the one I prepared last year on Social Impact Bonds. It is time to examine the ways in which Blockchain could interface with social impact investing to further concentrate power and wealth and exacerbate long-standing forms of global oppression under the guise of philanthropy. This narrative flips the prevailing sales pitch for Blockchain on its head and offers a strong critique of a technology many consider a powerful disruptive force.

With decentralized identity, we are cuing up permanent records for the masses with potentially disastrous consequences. Is it prudent to place our "trust" in a technology of unknown origin? No one knows who or what Santoshi Nakamoto actually is and whose interests this invention advances. Why would we be so naive as to remake the world's social and economic structures around this code? What would it mean to live life on a ledger?"...

By Morgan Simon "Yesterday, William E. “Bill” McGlashan Jr., Founder and Managing Partner of the $13B TPG Growth fund, was indicted in the elite college scandal. He was particularly noted for his candor in recorded phone calls about his efforts to buy a slot at USC for his child for $250,000. The tactic, employed by ringleader William Singer, was to photoshop McGlashan’s son to look like a recruitment-worthy football kicker — despite the fact that his son’s high school did not have a football team.

McGlashan has recently gained notoriety as a proponent of impact investing. The Rise Fund, an initiative he co-founded under the TPG umbrella, has raised over $2B for interventions seeking to address global poverty and climate change."...

Amid public critiques of Wall Street’s amorality and protests against sharpening inequality since the financial crisis of 2008, the emergent discourse of philanthrocapitalism—philanthropic capitalism—has sought to recuperate a moral center for finance capitalism. Philanthrocapitalism seeks to marry finance capital with a moral commitment to do good.

These strategies require new financial instruments to make poverty reduction and other forms of social welfare profitable business ventures. Social impact bonds (SIBs)—which offer private investors competitive returns on public sector investments—and related instruments have galvanized the financialization of both public services and the life possibilities of poor communities in the United States and the Global South.

This article maps new intrusions of credit and debt into previously unmarketable spheres of life, such as prison recidivism outcomes, and argues that contemporary social finance practices such as SIBs are inextricable from histories of race—that financialization has been and continues to be a deeply racialized process. Intervening in debates about the social life of financial practices and the coercive creation of new debtor publics, we chart technologies meant to transform subjects considered valueless into appropriate, even laudable, objects of financial investment.

Because their proponents frame SIBs as philanthropic endeavors, the violence required to financialize human life becomes obfuscated. We aim to historicize the violence of financialization by drawing out links between financial capitalism as it developed during the height of the Atlantic slave trade, and the more subtle violence of philanthropic financial capitalism. Though the notion that slaves could be a good investment—both in the profitable and moral sense of the word—seems far removed from our contemporary sensibilities, the shadow of slavery haunts SIBs; despite their many differences, both required black bodies to be made available for investment. Both also represent an expansion to the limits of financialization."

By Kenneth Saltman "Investment banks such as Goldman Sachs, Bank of America, and J. P. Morgan; philanthropies such as the Rockefeller Foundation; politicians such as Chicago Mayor Rahm Emanuel and Massachusetts former governor and now Bain Capital managing director Deval Patrick; and elite universities such as Harvard have been aggressively promoting Pay for Success (also known as social impact bonds) as a solution to intractable financial and political problems facing public education and other public services. In these schemes, investment banks pay for public services to be contracted out to private providers and stand to earn much more money than the cost of the service. For example, Goldman Sachs put up $16.6 million to fund an early childhood education program in Chicago, yet it is getting more than $30 million[1] from the city. While Pay for Success is only at its early stages in the United States, the Rockefeller Foundation and Merrill Lynch estimate that by 2020, the market size for impact investing will reach between $400 billion and $1 trillion.[2] The Every Student Succeeds Act of 2016, the latest iteration of the Elementary and Secondary Education Act of 1965, directs federal dollars to incentivize these for-profit educational endeavors significantly, legitimizing and institutionalizing them.

Success is promoted by proponents as an innovative financing technique that brings together social service providers with private funders and nonprofit organizations committed to expanding social service provision. In theory, Pay for Success expands accountability because programs are independently evaluated for their success and the government only pays the funder (the bank) if the program meets the metrics. If the program exceeds the metrics, then the investor can receive bonus money, making the program much more expensive for the public and highly lucrative for the banks.

Banks love Pay for Success because they can profit massively from it and invest money with high returns at a time of a glut of capital and historically low interest rates. Politicians (especially rightist democrats) love Pay for Success because they can claim to be expanding public services without raising taxes or issuing bonds and will only have the public pay for “what works.” Elite universities and corporate philanthropies love Pay for Success because they support “innovation” and share an ethos that only the prime beneficiaries of the current economy, the rich, can save the poor.

Pay for Success began as social impact bonds and were imported into the United States from the United Kingdom around 2010. They were promoted by the leading consultancy advocate of neoliberal education, McKinsey Consulting; the neoliberal think tank Center for American Progress, which was founded by former Clinton chief of staff and Democratic Party leader John Podesta (who also led Obama’s transition); and the Rockefeller Foundation. Pay for Success expansion is now the central agenda of the Rockefeller Foundation. Shortly before championing Pay for Success for Chicago, Rahm Emanuel served as Obama’s chief of staff, having had a long career as a hard-driving Democratic congressman and political money raiser and also an investment banker. Certain other key figures lobbied to expand the use of Pay for Success. Most notably, Jeffrey Liebman went from Obama’s Office of Management and Budget to a large center at Harvard, the Government Performance Lab in the Kennedy School of Government, dedicated to expanding Pay for Success. Liebman is a leader of the Center for American Progress and was a key economic advisor to Obama in his 2008 campaign. Other key influencers of Pay for Success include the Rockefeller Foundation and Third Sector Capital.

Advocates explain that the value of a Pay for Success program is allegedly that it creates a “market incentive” for a bank or investor to fund a social program when there is not the political will to support the expansion of public services, and second, by injecting “market discipline” into the bureaucratically encumbered public sector, Pay for Success will make the public sector “accountable” through investment in “what works,” and it will avoid funding public programs for which the public has “little to show,” as Liebman and Third Sector Capital Partners are fond of suggesting (Wallace, 2014).[3] The value of any public spending in this view must be measurable through quantitative metrics to be of social value. Third, it consequently saves money by not funding programs that cannot be shown to be effective, and fourth, it shifts risk away from the public and onto the private sector while retaining only the potential social benefit for the public. Last, it mobilizes beneficent corporations, banks, powerful nonprofit companies, and philanthropic foundations to save the poor, the powerless, and the public from themselves. Here Goldman Sachs frames its profit-seeking activities as corporate social responsibility, charity, and good works that define its image in the public mind. In fact, all five of these positions that advocates claim explicitly or implicitly to support the expansion of Pay for Success are baseless.

The Myths of Pay for Success

Myth 1: Market Discipline

Repeating a long-standing neoliberal mantra of private-sector efficiency and public-sector bloat, advocates of Pay for Success claim that the programs are necessary because they inject a healthy dose of market discipline into the bureaucratically encumbered and unaccountable public sphere. According to the leading proponent of Pay for Success, Jeffrey Liebman, private-sector finance produces this market discipline because governments do not monitor and measure the services contractors provide. Says Liebman, “[Government] programs that don’t produce results continue to be financed year after year, something that would not happen in the business world.”[4] This is an odd claim from one of Obama’s leading economic advisors at the time that Obama was sworn in as president and who proceeded to have the public sector bail out the private sector. The 2008 financial bailout of the banks by the U.S. federal government represents a repudiation of the neoliberal logic of the natural discipline of markets and of deregulation. The private sector, including banks, insurance companies, and the automotive industry, needed the public sector to step in and save unprofitable businesses and businesses that had invested in the deregulated mortgage-backed securities market. More broadly, some of the largest sectors of the economy, such as defense, agriculture, and entertainment, rely on massive public-sector subsidies to function. Specifically, the financial crisis and consequent recession were a result first of neoliberal bank deregulation and a faith in markets to regulate themselves, but also they demonstrated the illegal activity, fraud, and lies of the same banks that now seek profit through Pay for Success, including Goldman Sachs, Bank of America, Merrill Lynch, and J. P. Morgan.

Pay for Success proponents claim that the financing scheme is necessary because there would otherwise not be the political will to do projects like early childhood education in Chicago for a couple of thousand children or recidivism reduction programs in Massachusetts. Third Sector Capital Partners, a nonprofit that relies on Pay for Success expansion as a cornerstone of its business, claims that Americans do not support state spending and hence Pay for Success is necessary.[5] However, Gallup shows that 75 percent of Americans favor expanded public spending on infrastructure, and 58 percent support replacing the Affordable Care Act with a universal federal health care system.[6] Indeed, as long-standing studies and, more recently, the Bernie Sanders presidential campaign of 2016 indicate, a large percentage of Americans support a range of increased spending on progressive social programs.

A mantra found in the literature that advocates Pay for Success is that it “allow[s] the government to avoid paying for programs that don’t make a difference.”[7] For working-class and poor citizens, many of whom are working two or three low-paying jobs, the cost of private early childcare and education is a major financial burden. The fact that early childcare and education have become corporatized by national companies who pay superexploitative wages to workers only worsens the situation. The fact that early childcare and education are vital economic needs raises a question about whose political will is in question when Pay for Success proponents claim that the only way to provide early child educational services is with the involvement of banks, and that without banks, it should not be provided. The parents and community members are not the ones who lack the political will. Political and financial elites do not want to pay for other people’s children—without a cut."...

"Late in 2014, Nicholas Woodman, the founder and chief executive of GoPro, announced what appeared to be an extraordinary act of generosity.

Mr. Woodman, then 39, had just taken his camera company public, and was suddenly worth about $3 billion. Now he was giving away much of that wealth — some $500 million worth of GoPro stock — to the Silicon Valley Community Foundation, an organization based in Mountain View, Calif., that would house the assets of the newly formed Jill and Nicholas Woodman Foundation.

“We wake up every morning grateful for the opportunities life has given us,” Mr. Woodman and his wife said in a statement at the time. “We hope to return the favor as best we can.”

The executive basked in prestige and gratitude. The Chronicle of Philanthropy named Mr. Woodman one of “America’s most generous donors” that year, placing him alongside established philanthropists like Bill and Melinda Gates and Michael R. Bloomberg.

But four years on, there is almost no trace of the Woodman Foundation, or that $500 million. The foundation has no website and has not listed its areas of focus, and it is not known what — if any — significant grants it has made to nonprofits. An extensive search of public records turned up just one beneficiary: the Bonny Doon Art, Wine and Brew Festival, a benefit for an elementary school in California.

Instead, the Woodman Foundation essentially exists as an account within the Silicon Valley Community Foundation, which is not required to disclose details about how, if at all, individual donors spend their charitable dollars. Mr. Woodman, GoPro and the Silicon Valley Community Foundation all declined to discuss the Woodman Foundation."...

"Social impact bonds, also known as a pay-for-success loans, are loans that seek to achieve a positive social outcome, and reduce future costs by investing in prevention and intervention programs in the public sector.

This fall, Goldman Sachs and the investor J.B. Pritzker will put $1 million toward expanding a Utah school district's early-childhood program by 450-600 students through a social-impact bond. The idea is that students who go through the program are less likely to need expensive special-education services later in their academic careers. If successful, the venture would be the first investment of this kind to finance a public school program, according to officials.

Pupils are tested at the beginning of the program to identify which ones are likely to need special education in the future. For every child that fits this description—but later scores at grade level—a savings equal to the avoided costs is recorded and paid back to the investors. Students who complete the preschool program are tested annually to calculate avoided costs. If and when the loan is paid off, additional money saved is divided between the district and investors, up until the point that students complete 6th grade."...

Note. Re-sharing this document does not indicate endorsement. ______________________________

The final page of this report cites the following: "The hosts of the Global Education Futures Forum, Reengineering Futures is a Russian think tank that developed a 20-year roadmap of 16 trends shaping global learning." The following are the websites referenced for context about where authors of the report apparently view the future of education to be headed: http://refuture.me and https://www.edu2035.org/

By Alison McDowell (WrenchInTheGears.com) "This week Jeff Bezos of Amazon announced plans to direct $2 billion, in part, to the creation of a “Day 1 Academies Fund,” which would underwrite the costs of full-scholarship “tier one” Montessori model preschools in low-income communities.

I spent much of this past summer researching the construction of a speculative social impact investment market dealing in pre-school children’s human capital data (here, here, here, here, here, here, and here).

Major players including University of Chicago economist James Heckman; hedge fund manager Robert Dugger; former Minneapolis Federal Reserve economist Arthur Rolnick; billionaire politician JB Pritzker; and Utah tech entrepreneur Jim Sorenson carried out this work quietly, diligently, steadily over the past decade.

The machine they’ve built is vast with tentacles reaching into influential foundations, institutions of higher education, venture capital firms, global banks, bipartisan political circles, and NGOs. It’s the puppet master behind all the Smart Start, Early Literacy, Grow Up Great, Grade Level Reading campaigns you see posted on buses and billboards in your town.

They use cute baby pictures in the advertising, but we need to recognize these efforts for what they truly are. This is about power, using digital technologies and predictive analytics, to mine rising global poverty rates for profit. Ever more vicious forms of innovative finance, like Social Impact Bonds and now impact securities, seek to transform human life into fictitious capital the elite can manipulate to enrich themselves. In this end game of late-stage capitalism, the data of vulnerable children will be collected and used as a source of profit extraction. Make no mistake. The Amazon “academies” will be data centers first and foremost.

The Bezos announcement indicates that perhaps this infrastructure is ready for prime time. Heckman and Pritzker have been doing road shows to sell it for years. I’m sure they’re anxious to see how the motor runs. Within moments of hearing the announcement I began poking around to see where the connections were. What immediately came up was that Jeff’s mother Jackie, who helps manage the Bezos Family Foundation, presented on the topic of preschool human capital investing with James Heckman at the Aspen Institute Festival in June 2017. The title of their talk was “The ROI (Return on Investment) That Matters.” You can be sure that if I’m sitting here at my kitchen table and know all of this, Bezos, his mom, and Heckman know far more.

People are increasingly concerned about the degree to which power and wealth are concentrated in the hands of the tech sector, Amazon in particular. They hear the stories about the terrible working conditions, the surveillance of labor via wearable technologies, that workers can’t afford shelter. The solution offered is a roving RV work model. While some have embraced Alexa as a virtual assistant, many others see it for the intrusive data-gathering device that it is. Now Amazon and its dynamic pricing model is moving into bricks and mortar retail through the purchase of Whole Foods. There is a growing sense we are being watched; that our value is data tied to where we go and what we buy; that our options for meaningful work are shrinking; and Bezos sees us as pawns to be managed for his benefit. Plus, those AWS (Amazon Web Server) data lakes!

My hope is people will realize this announcement isn’t just about Bezos or Amazon. It’s a sign the impact-investing, early childhood education machine is getting ready to roll. It is a mammoth, mammoth machine. Many will be scooped up in its net. Bezos is a great one to put out front. Many are already angry with him, so they throw up tweets expressing their dismay but they don’t look deeper. Some get that there is an aspect of data profiling, that it might also involve ed-tech promotion, but they are NOT talking about speculative global finance. Impact investing is not on anyone’s radar, but it should be. If you haven’t seen my videos on Social Impact Bonds or Blockchain Identity, check out the links here and here.

I’ve read widely and gotten pretty good at registering the signals of where things are headed. No one has shown me the plans for these Academies, but I can start to guess what they might look like. Join me for a tour of a fictional pre-school I’ll call “Montessori, Inc.” In the scenario that follows I lay out elements of a preschool model designed to serve the social impact investment market that Heckman and his partners have built. It includes links to examples already in operation in the real world. Will Bezos’s Academies follow such a model? Only time will tell.

Surveillance play tables are real. This is the world we live in now.

"Join us on the tour:

“A Company” is the venture partner backing “Montessori, Inc.”

“Montessori, Inc.’s” centers are found in the nation’s poorest communities, often in past-their-prime strip shopping centers near the highway. Picture the pop-up charter schools all over Florida. Link

“A Company” cultivates women of color to become franchise operators of “Montessori, Inc.” and touts its status as a MBE, WBE enterprise. Link and Link

Once on board, franchise managers are expected to toe “Montessori, Inc.’s” line (which is actually “A Company’s” line) and follow all company procedures, especially regarding expansive data collection and family compliance policies.

The teaching staff is low income. Most juggle several gigs to get by.

They are expected to keep up with the latest micro-credentials and take online training classes they can’t afford to stay eligible to teach. Link

While a “Montessori, Inc.” preschool education is offered free of charge, not everyone who is eligible will be able to enroll. “A Company” outsources their review process to “Progress Pathways” to make sure each family is a “good fit” for the program. Link

Preschool operations are funded using innovative finance mechanisms structured around outcomes-based contracts. For schools to meet their agreed-upon “success” target, franchise operators must carefully curate whom they admit into the program. Because “Montessori, Inc.” is not a public preschool, they can do that. Link

One part of the evaluation is the LENA screening. Each child must wear a vest with a recording device for a full day. Data is analyzed to predict if the child is likely to fall into a “word gap,” meaning they are not spoken to enough at home, which could impact their literacy levels. A low LENA score can be a disqualifier. Link

If accepted, parents must then agree to give “A Company” ownership of all the data collected on their child and the family through school-affiliated apps while the child is enrolled in the program. Data collected informs dynamic pricing for goods and services purchased at any of “A Company’s” affiliates. Of course the goal of the company is to help families make “good decisions.” Nudge pricing is part of that strategy. Link

Each student enrolled at “Montessori, Inc.” is assigned a digital identity on Blockchain. All of their data and credit goes into the e-wallet. Link and Link

If a family relocates, they take their child’s accumulated data with them to another center. “A Company” promotes this as a means by which poor children “build social capital” from an early age. Link

Parents are expected to volunteer twice a week, and participation is tracked on an app. Their time, valued at less that $5 per hour, is compensated not in cash but in points redeemable in “A Company” credit. Link

They’re also expected to participate in “Montessori, Inc.’s” “smart family tips” text-messaging platforms. If they don’t document that they completed the required number of suggested educational home-based activities or respond promptly to text messages, their children can be bumped from the program. Link and Link

Upon enrollment, each family is issued a device programmed with behavior-tracking games geared to early literacy development and executive function training. Toddlers need to continue to level up on their custom development trajectory or risk be bumped from the program. Link and Link

Families must keep their child’s device charged and in working condition and send it to school each day. This “Montessori Minder” device is a key element of the self-directed curriculum offered by the school. Each child is given a personalized playlist of activities for the day, which they work through at their own pace. They submit evidence of tasks completed to the online student portfolio platform. Link and Link

Access to each center is authorized through biometric scans at the front door. Link

Attendance is generally used as one of the impact investing metrics, so that is taken on an app to ensure that data is high quality. Link

The “smart” classrooms are minimally furnished. All furniture and physical items come with embedded beacons that track students throughout the day. Link

All the children and staff wear slippers with Internet of Things (IoT) sensors embedded in the soles that track their interactions with one another and with physical objects in the space. Link

The centerpiece of each pre-school is their WePlaySuperSmart table. While toddlers interact collaboratively with screen-based activities on the digital table, a video camera captures their interactions. AI is then use to analyze the video and complete behavioral rubrics in a dashboard outlining where they are within the “Big Five” traits OCEAN (Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism). Link and Link

Other activities during the day measure behavioral elements like grit, resilience and executive function. Some sites are piloting EEG brainwave headbands. Link and Link

With the play tracker app, each child gets a haptic buzz when it’s time to go outdoors and play on the smart equipment. The app tracks their fitness goals against online games tied to literacy progression and non-cognitive skill development. The program investors love that Play Tracker keep every child moving on their development pathway. Link and Link

For schools with limited access to outdoor space “A Company” provides access to indoor augmented reality play systems (that have the added advantage of increased data capture). Link and Link

Parents can monitor classes via remote cameras, and real time data is uploaded to each student’s dashboard throughout the day.

Students are expected to be goal-oriented, motivated, and self-reflective while at school. Student agency is highly valued by “A Company” and the games on “Montessori Minder” are calibrated to push each child towards that goal. Link

By the end of their time at “Montessori, Inc.” each student will have a high-resolution picture in data of where they fit into the human capital pipeline of the gig economy.

“’A Company” is proud to be able to make that happen and ensure no toddler is left behind."

By Alison McDowell "This is another post with clips culled from talks given at the Center for the Economics of Human Development’s working group, Measuring and Assessing Skills: Real Time Measurement of Cognition, Personality and Behavior. It was held at the University of Chicago in February 2018. I previously shared a segment called from “Math to Marksmanship” with Nobel Prize economist James Heckman, Gregory Chung of UCLA-CRESST and Jeremy Roberts consultant to PBS Kids.

Below are ten additional excerpts from that talk. I watched all two hours and pulled highlights, so you don’t have to. Topics covered include: game-based learning for pre-schoolers; how to get pre-readers to create online accounts; how digital games can be used to identify “Big Five” behavior traits; and a real doozy, Dr. Heckman’s half-joking suggestion that gamification and incentives of pornography for adults could encourage parents to have their children use online games more often. No, really.

Below is a relationship map of the organizations mentioned in the presentation. You can access an interactive version here.

PBS Kids is a media content provider for children ages 2 to 8 years old. Nearly 65% of all children in that age range interact with PBS Kids’ content at some point during any given month. Their apps have been downloaded 45.5 million times, and they deliver 276 million streams per month across multiple digital platforms. Their key strategy is to try to be wherever the kids already are: desktop, television, mobile, and classroom (whiteboards/chromebooks)."...

"What is Ocean Protocol?Ocean Protocol is an ecosystem for sharing data and associated services. It provides a tokenized service layer that exposes data, storage, compute and algorithms for consumption with a set of deterministic proofs on availability and integrity that serve as verifiable service agreements. There is staking on services to signal quality, reputation and ward against Sybil Attacks.

Ocean helps to unlock data, particularly for AI. It is designed for scale and uses blockchain technology that allows data to be shared and sold in a safe, secure and transparent manner.

How Ocean Protocol Works

The Ocean Protocol is an ecosystem composed of data assets and services, where assets are represented by data and algorithms, and services are represented by integration, processing and persistence mechanisms. Ocean Protocol facilitates discovery by storing and promoting metadata, linking assets and services, and provides a licensing framework that has toolsets for pricing."...

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